The chapter provides an overview of intergovernmental relations and horizontal coordination in Estonia’s local government system. It examines the structure of local government; the roles of the central government, municipalities, and the European Union; the challenges faced; recent reforms; and potential opportunities for improvement. It also explores the mechanisms and forms of inter-municipal cooperation and cross-border cooperation. Based on the literature and document analysis as well as data from the official government sources, it can be concluded that Estonia is a unitary parliamentary republic with a decentralised structure. The central government plays a significant role in shaping state policy, while municipalities have a degree of autonomy and responsibility for providing public services and infrastructure development. The administrative reform of 2017 aimed to increase the efficiency and effectiveness of local government by merging smaller municipalities into larger units. However, challenges remain, including a lack of clarity in the roles and responsibilities of different levels of government, coordination issues, and growing regional disparities. The findings provide insights for policymakers and practitioners seeking to enhance intergovernmental relations and regional development in Estonia.